Breaking the Small Business Code

New Stimulus Bill 's Housing Related Benefits & College

     We don't know all the details yet but the recently passed Stimulus Package looks to have three potential benefits for families thinking about buying or refinancing a home. I wanted to share how these items can have possible benefits for college planning:

• In 2008, the conforming loan limits were increased to $729,750.  The American Recovery and Reinvestment Act of 2009 (ARRA 09) reinstates the $729,750 conforming loan limits until December 31, 2009.  This means lower interest rates for loans up to this amount. Higher rates come with "jumbo loans" that exceed this amount.  If your home still has equity, this could be a good thing to take advantage of lower interest rates for college planning!

• The 2009 bill will offer first-time home buyers a tax credit in the amount of $8,000 providing you purchase a home between January 1, 2009 to December 31, 2009.  The credit does NOT have to be paid back to the government unless the buyers sell their home within 3 years after the date of close of escrow on the home.  If you have the means, this could be a great time to help your student(s) buy their first home in lieu of a dorm. 

• The American Recovery and Reinvestment Act of 2009 offers incentives to existing home owners for going Green.  A tax credit of up to $1500 is given to home owners who make some “Green” home improvements.  These Green home improvements include, but not limited to, energy efficient windows, doors, and furnaces.  So doing something to save energy costs could help reduce taxes both of which can improve tax flow for college.

     As I learn more about ARRA 09, my team and I will look for ways to help college-bound families use the benefits to help pay for college!

College Housing is Unpredictable

      There is a great article in the Boston Globe (Boston.com) on the impact of the turmoil in college admissions and its domino affect on dorms and class size.  This article focuses on how Brown had to scramble to find dorm space for incoming freshman when more students accepted admissions offers than they planned.

     There are great descriptions of how Brown was forced to convert lounge areas and kitchens were converted into dorm space.  Because it is Brown's policy to only put two students in a room, some lucky students featured in the article had huge living spaces, some with kitchens!

     Believe me, this isn't the only college where overcrowding from more students than expected is happening.  Students at other colleges are being housed 3 to a room in 2-person rooms, being housed in local hotels, and many at schools without guaranteed housing are on waiting lists and sleeping on friend's floors.

    Technically, this really ISN'T news.  Something like this happens every year at just about every college at some level or another.  But what makes this so noteworthy is it is happening to such a wide extent and in larger than ever numbers! So how what has changed?

      First, the "echo boom" or the bulge made up of children of the baby boom are entering college and will through 2012 through 2015 depending on whose numbers you use.  Second, colleges know students are applying to more colleges than ever to ensure they get into a college.  Colleges felt they had to admit more students than previous years to make sure the number they needed actually enrolled. And finally, because the echo boom will be followed by the "echo bust", the colleges do not want to build new facilities to house more students who won't be coming in 3 to 7 years from now.

      What do you do if you have a High School senior, spring admit or maybe a freshman being housed in one of these "creative" locations? 

      If you have a senior, make sure you look at the housing options and guarantees at the colleges on your list if living on-campus is important to you.  If you have a spring admit (senior who was admitted to the spring semester), make sure you have your housing deposit in on time.  Discuss your options NOW with the college housing staff to know what housing will be guaranteed for your student.   If your student is being housed off-campus or in "unusual" spaces, be patient.  Students drop out beginning almost immediately all the way through the end of the semester. 

    Is your student facing housing challenges?  Let me know and I'll see if we can get you some suggestions and solutions!

College Housing Crunch

DATE: 05/29/2008 10:50:24 AM ----- BODY: >компютриou thought all the challenges are over when you got admitted to a college, think again!  The next hurdle is housing.  A record number of colleges are experiencing an on-campus housing crunch which means some students may find themselves with no place to live when Fall classes start!

Good news is this happens EVERY year so it is not a new phenomenon so there are alternatives.  What is new is the extent of the crunch.   I hate to use the"cliche" but is this IS a perfect storm where a record number of students meets a fixed (or reduced) amount of housing.  Most colleges do NOT have enough housing for all students - especially the large public universities.  And they have admitted more students this coming year than in the past!

What colleges do to assign housing is a combination of first-come/first-served, freshman first, and a lottery.  Most colleges put housing applications in the order it arrives.  Many colleges will give preference to freshman so they can integrate into college easier.  After assigning a percentage of freshman, the housing office fills in from the dated list.  Other colleges put everyone into a lottery and will assign a percentage of each grade level to each dorm.  For example, a college may take the first 75% freshman housing applications and then spread the 25% balance among the various grade levels based on the date of their housing applications.  But whatever the process a college uses, it is a absolute certainty some of you WILL NOT have on-campus living on day 1.

Good news is most students will eventually get on-campus housing if they want it BUT it may take a week, a month or a full semester to get in.  That's because of how the admissions game is played.  The colleges ALWAYS admit more students than they need because they know a certain percentage (called yield) those admitted (and who may have housing assigned) will not show up.  Colleges also know another percentage will drop out or move out of the dorms within the first semester.  So like airlines, they overbook the rooms available to make sure there are no empty ones.

So what do you do if you don't get housing for the beginning of the semester?  First thing is to communicate with the housing office.  Find out what they are doing for students without housing.  Many will provide temporary housing to students who did not get dorm space.  Some colleges will literally put students up in hotels until the system sorts itself out.

Next, find out if the housing office has in-home housing for the temporarily displaced students.  I did not get into the dorms when I went to UC Irvine over 40 years ago!  I lived with a family in their home for the first month of college.  This family knows that many students need temporary space and rent their guest room to students who just need a place to sleep.

Creative families will often get together and rent space in a long-term residence hotel for their students on a month-to-month basis.

Avoid renting an apartment for freshman or sophomores.  They usually require long-term leases and it is difficult to integrate into the campus "life" if you are commuting to the school.  It is especially tough where students need to get off campus before traffic or before "dark".

But above all BE PATIENT.  Keep talking (nicely) to the housing office.  Make friends with them.  Ask them for their help and be flexible.  If you are persistent, almost all student can get on-campus housing.